Charge what your time costs
What should you charge as a freelancer? Start from your take-home
Enter the annual take-home you want, your billable hours, and your real costs — health insurance, overhead, weeks off. The calculator grosses everything up for the 15.3% self-employment tax and shows the minimum hourly rate that actually gets you there.
Last updated: July 2026 · Free · No signup
Your numbers
What you want left for yourself after self-employment tax and business costs — before federal income tax, like a W-2 gross salary.
Billable = hours a client actually pays for. Admin, marketing, proposals, and email are real work — but nobody pays for them directly.
Weeks off covers vacation, holidays, and sick days — nobody pays you for those anymore. The $625/mo insurance default is the 2026 U.S. average unsubsidized benchmark silver premium (KFF). Overhead = software, phone, insurance, gear, workspace.
Planning estimate, not tax advice. The headline rate covers federal self-employment tax only — the range below it adds a rough income-tax cushion.
Your rate
Minimum billable hourly rate
$68.51/hr
Quote it as $70/hr
With 25–30% set aside for SE + federal income tax instead: $78–$83/hr.
Day rate (8 hrs)
$548
Revenue / working week
$1,713
Revenue / year
$82,207
Where each billable hour goes (1,200 hrs/yr)
- Your take-home
- $50.00
- Self-employment tax (15.3% × 92.35%)
- $9.26
- Health insurance
- $6.25
- Business overhead
- $3.00
- Billable hourly rate
- $68.51
Naive math — salary ÷ 2,080 hours — says $28.85/hr. That number ignores taxes, insurance, overhead, and every unbillable hour.
Quote $70/hr — and hold it
Round numbers are easier to quote and negotiate. If a client pushes back, trim the scope instead of the rate — a discount you give once becomes the price forever.
Tax reminder: set aside 25–30% of profit for quarterly estimated taxes (Form 1040-ES) — nobody withholds anything for you.
Why your rate must be higher than your old salary suggests
The most common freelance pricing mistake is dividing a salary by 2,080 hours (52 weeks × 40 hours) and quoting that. It fails three times over. First, taxes: an employer pays half of your Social Security and Medicare — self-employed, you pay both halves, the 15.3% self-employment tax. Second, benefits: health insurance, vacation, sick days, and equipment now come out of your pocket. Third, and biggest: you can only bill part of your week. Proposals, invoicing, bookkeeping, and finding the next client are hours you work but nobody pays for.
The tax side follows IRS Schedule SE: 15.3% applied to 92.35% of net profit, with the 12.4% Social Security portion capped at $184,500 in 2026. The default $625/month insurance figure is the 2026 U.S. average unsubsidized benchmark silver premium for a 40-year-old, per KFF— replace it with your actual premium.
How to calculate your freelance hourly rate
To calculate a freelance hourly rate, add annual health insurance to your target take-home, gross that up for self-employment tax (divide by 1 − 14.13%, since 92.35% × 15.3% ≈ 14.13% of profit), add annual business overhead, then divide by billable hours per year — working weeks times billable hours per week.
Rate = [ (take-home + insurance) ÷ (1 − 14.13%) + overhead ] ÷ billable hourswhere 14.13% = 92.35% × 15.3% SE tax, and billable hours = (52 − weeks off) × billable hrs/week
Worked example: $60,000 take-home, 25 billable hours a week
A freelancer wants $60,000 a year for themselves, works 40-hour weeks with 25 billable hours, takes 4 weeks off, pays $625/month for health insurance and $300/month in overhead. Naive math says $60,000 ÷ 2,080 = $28.85/hr. Here is the honest version:
| Line | Amount |
|---|---|
| Target take-home | $60,000 |
| Health insurance: 12 × $625 | +$7,500 |
| SE tax gross-up (15.3% × 92.35%) | +$11,107 |
| Business overhead: 12 × $300 | +$3,600 |
| Gross revenue needed | $82,207 |
| Billable hours: (52 − 4) × 25 | 1,200 |
| Minimum hourly rate | $68.51 → quote $70/hr |
Almost two and a half times the naive number — before federal income tax, which pushes the planning range to roughly $78–$84/hr with a 25–30% total tax set-aside. That gap is not markup; it is the cost of running the business your employer used to be.
Set the rate, price the job, send the bill
This calculator gives you your floor — the rate below which the work costs you money. To sanity-check it against what customers actually pay for cleaning, lawn care, handyman work, and other local services in your area, use the service price calculator. And when the job is done, bill it professionally in two minutes with the free invoice generator. If your freelancing happens behind a wheel, the gig driver pay calculator runs the same honest math for delivery work.
Frequently asked questions
What should I charge as a freelancer?
Work backwards from the take-home you need, not from what feels polite. Add annual health insurance to your take-home target, gross that up for the 15.3% self-employment tax (applied to 92.35% of profit), add business overhead, then divide by your real billable hours — working weeks times billable hours per week. That number is your floor; market demand and specialization set the ceiling.
Why is my freelance rate so much higher than my old hourly wage?
Because a W-2 wage hides costs your employer used to pay: the employer half of Social Security and Medicare, health insurance, paid vacation, sick days, and equipment. As a freelancer you also only get paid for billable hours — admin, marketing, and proposals are on your own clock. A rate two to three times your old hourly wage is normal math, not greed.
How much should freelancers set aside for taxes?
A common planning rule is 25–30% of net profit, which covers the 15.3% self-employment tax plus federal income tax for most freelancers. If you expect to owe $1,000 or more for the year, the IRS expects quarterly estimated payments via Form 1040-ES in April, June, September, and January — no one withholds anything for you.
What counts as billable hours?
Only time a client directly pays for: the design, the code, the cleaning, the repair. Invoicing, bookkeeping, marketing, proposals, revisions you absorbed, and email are real work but unbillable. Most independent workers bill well under their total hours worked — which is exactly why dividing a salary by 2,080 hours produces a rate that quietly bankrupts you.
Can I deduct health insurance if I am self-employed?
Usually yes — the self-employed health insurance deduction (IRS Form 7206) lets most self-employed people deduct premiums from income tax. But it does not reduce self-employment tax: Schedule SE is calculated on your net profit before that deduction. This calculator prices premiums out of after-SE-tax profit for that reason.
Should I charge hourly or per project?
Start from your hourly floor either way. For fixed-price work, estimate the hours honestly, multiply by your rate, and add a buffer for revisions — a flat price below your hourly floor is just a discount in disguise. Hourly protects you on open-ended work; flat pricing pays better when you are fast at a repeatable job.
This page is general information, not tax or legal advice. Confirm your situation with a tax professional or IRS.gov.
Next step
Rate set? Get clients who pay it
Brixaz is a free local marketplace — $0 fees, no commissions, no cut of your rate. Post your freelance service so nearby clients find you, or browse gigs people are hiring for right now.